The colonial microalga Botryococcus braunii accumulates large quantities of hydrocarbons mainly in the extracellular space; most other oleaginous microalgae store lipids in the cytoplasm. Botryococcus braunii is classified into three principal races (A, B, and L) based on the types of hydrocarbons. Race B has attracted the most attention as an alternative to petroleum by its higher hydrocarbon contents than the other races and its hydrocarbon components, botryococcenes and methylsqualenes, both can be readily converted into biofuels. We studied race B using fluorescence and electron microscopy, and clarify the stage when extracellular hydrocarbon accumulation occurs during the cell cycle, in a correlation with the behavior and structural changes of the lipid bodies and discussed development of the algal colony. New accumulation of lipids on the cell surface occurred after cell division in the basolateral region of daughter cells. While lipid bodies were observed throughout the cell cycle, their size and inclusions were dynamically changing. When cells began dividing, the lipid bodies increased in size and inclusions until the extracellular accumulation of lipids started. Most of the lipids disappeared from the cytoplasm concomitant with the extracellular accumulation, and then reformed. We therefore hypothesize that lipid bodies produced during the growth of B. braunii are related to lipid secretion. New lipids secreted at the cell surface formed layers of oil droplets, to a maximum depth of six layers, and fused to form flattened, continuous sheets. The sheets that combined a pair of daughter cells remained during successive cellular divisions and the colony increased in size with increasing number of cells.